Health Economics
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Questions and Answers

What is one of the determinants of elasticity for prescription drugs?

  • Availability of substitutes (correct)
  • Low demand in the market
  • Presence of numerous alternative uses
  • High proportion of income spent on drugs

    • In perfect competition, who sets the prices?

  • Consumers
  • Companies (correct)
  • Government
  • Industry regulators

    • Which market structure promotes differentiation instead of standardized products?

  • Monopolistic competition (correct)
  • Perfect competition
  • Oligopoly
  • Monopoly

    • What is a characteristic of monopolistic competition?

    <p>Standardized and interchangeable products</p> Signup and view all the answers

    Which type of market structure involves firms that are interdependent and set prices through price leadership?

    <p>Oligopoly</p> Signup and view all the answers

    What is a characteristic of a monopoly?

    <p>Increase in price due to barriers to entry</p> Signup and view all the answers

    Why does perfect competition have a horizontal demand curve?

    <p>&quot;Price takers&quot; companies</p> Signup and view all the answers

    What kind of economics model does health care most likely fit?

    <p>Monopolistic competition</p> Signup and view all the answers

    What is the economic term for the satisfaction obtained from the consumption of a good or service?

    <p>Utility</p> Signup and view all the answers

    What are the three basic resources in economics?

    <p>Natural resources, Labor, Capital</p> Signup and view all the answers

    What concept is determined by marginal utility in economics?

    <p>Value</p> Signup and view all the answers

    Which economic concept states that the satisfaction received from obtaining one more unit of a good declines as one consumes more of it?

    <p>Law of Diminishing Marginal Utility</p> Signup and view all the answers

    In economics, which resource is typically considered as money and physical resources?

    <p>Capital</p> Signup and view all the answers

    What is the law that defines the quantity demanded of a commodity as inversely proportional to its price?

    <p>Law of Demand</p> Signup and view all the answers

    What determines the personal desire for one more unit of a good or service according to the text?

    <p>Utility</p> Signup and view all the answers

    What are costs proportional to according to the text?

    <p>Constraints</p> Signup and view all the answers

    What happens to supply when the number of sellers in the market increases?

    <p>Supply increases</p> Signup and view all the answers

    How do resource costs affect sellers' incentive to produce?

    <p>As costs increase, sellers make more profit</p> Signup and view all the answers

    Which factor can lead to an increase in supply of brand name drugs?

    <p>Increase reimbursement to pharmacies for generics</p> Signup and view all the answers

    In what situation do sellers typically produce more in preparation for future price increases?

    <p>When they expect prices to increase in the future</p> Signup and view all the answers

    What does market equilibrium price represent?

    <p>The price where demand and supply curves intersect</p> Signup and view all the answers

    Which type of demand is characterized by a decrease in overall revenue when prices increase?

    <p>Elastic demand</p> Signup and view all the answers

    What factor makes a product's demand more elastic?

    <p>Availability of many substitutes</p> Signup and view all the answers

    Which scenario would likely result in inelastic demand?

    <p>Demand for prescription drugs for life-threatening conditions</p> Signup and view all the answers

    What does a supply curve show?

    <p>Quantity of a commodity that sellers are willing to supply at a given price</p> Signup and view all the answers

    What happens when there is a change in quantity supplied?

    <p>The quantity supplied moves along the supply curve</p> Signup and view all the answers

    Which of the following is not a factor that can change supply?

    <p>Prices for related goods</p> Signup and view all the answers

    If technology advances, what is the likely impact on the cost of production?

    <p>Decrease in cost of production</p> Signup and view all the answers

    How do seller's expectations impact the supply curve?

    <p>They can lead to an increase in quantity supplied at every price point</p> Signup and view all the answers

    What happens when there is a change in supply?

    <p>The quantity supplied moves along the supply curve</p> Signup and view all the answers

    How can an increase in resource costs affect the supply curve?

    <p>It may lead to a decrease in overall supply</p> Signup and view all the answers

    What could make consumerism difficult in the health care market?

    <p>Incomplete information regarding price and quality</p> Signup and view all the answers

    Why is it challenging to measure the quality of health care products and services?

    <p>Care is usually customized and individualized</p> Signup and view all the answers

    What contributes to the inelastic demand in the health care market?

    <p>Consumer price sensitivity at the time of service need</p> Signup and view all the answers

    Why is health care considered a 'right' by some individuals?

    <p>Health care is universally needed</p> Signup and view all the answers

    What is a potential financial conflict of interest in the health care market related to supplier-induced demand?

    <p>Physicians controlling both supply and demand</p> Signup and view all the answers

    How does third-party insurance contribute to patient-induced demand in health care?

    <p>By decreasing patient out-of-pocket expenses</p> Signup and view all the answers

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